There was an interesting article by Alan Heavens in the Philadelphia Inquirer the other day about the state of the mortgage business. Here is an excerpt:
Lawrence Yun, senior economist for the National Association of Realtors, agreed that widening credit availability would help turn home sales around.
“Conforming loans are abundantly available at historically favorable mortgage rates,” Yun said. “Pricing has steadily improved on jumbo mortgages [over $417,000] since the August credit crunch, and FHA loans are replacing subprime mortgages.”
According to Freddie Mac, the 30-year fixed interest rate is hovering around 6.5 percent, and short-term rates could back down a bit in the next couple of months, depending on what the Federal Reserve’s Open Market Committee does when it meets Wednesday and Thursday.
Financial markets are “looking for about a 30 percent chance of a 25-basis-point rate cut rather than the 50 percent chance that they had previously expected,” said Frank Nothaft, Freddie Mac’s chief economist.